DRC Full Form in GST is ‘Demand and Recovery Forms. There are times when one might discover that they have not reported their income correctly or might have missed out on something while filing GST returns. In such cases, businesses or individuals eligible for filing GST returns can use the DRC-03 form to make a voluntary payment.
DRC forms in GST are basically related to demands and recovery proceedings. Only a few DRC forms came to use like DRC-03, DRC-01, and DRC-01A, etc. Notably, there are 28 DRC forms.
Different Instances when you can Make Payment Through DRC-03
- When an auditor of GST finds out you have been underpaying your taxes, interests, or penalties. A similar situation can also arise if the auditor discovers you have claimed more input in your tax credit than you were entitled to (for the year being reviewed).
- The total time for declaring the mistake in the returns of GST has already passed.
- If an income taxpayer is under criminal inspection and it turns out they have failed to make tax payments that they should have, a voluntary tax payment through DRC-03.
- It is standard practice for taxpayers to reconcile their accounts and finances for the year before filing their yearly returns. In case you made short taxes or interest payments or have failed to pay penalties for misreporting of taxable supplies.
- Mismatch of Liability – GSTR 1 – GSTR 3B: Added to the list of reasons for DRC 03 forms to be used on February 21, it allows you to pay tax liability shortfalls through the form of DRC 03.
- In response to a show cause notice: A taxpayer can pay the required tax (plus interest) using a DRC-03 form. However, it must be paid within a calendar month of the notice’s first issued.
If you receive a notice in October and pay by November, it will be considered paid within the required month. However, if you wait till December to make the payment, it will not be considered.
- Mismatch of ITC – GSTR 2A/2B – GSTR 3B: Another reason for using DRC-03 is when a taxpayer receives a notification that they have claimed an excess tax credit inputs in their GSTR-3B compared to their GSTR-2B. The form will be used when the taxpayer is depositing surplus ITC claims.
Prerequisites To Keep In Mind Before Filing Form DRC-03
A DRC-03 Form used to pay taxes voluntarily or involuntarily can be used in these circumstances:
- Anytime before the issuance of the show cause notice
- Anytime within the month of the issuance of the show cause notice.
- One can file more DRC-03 forms while acknowledgment from the tax officer is still pending.
Continuation of Recovery Proceedings
As per section 84(a) of the act, where any amount payable to the government by any taxpayer by a notice of demand served against him and the amount got enhanced in appeal, revision, or in any other proceedings taken against that dues, then a revised demand notice need not be served to the taxpayer.
This form is issued as an order for the reduction or enhancement of such demands as per Rule 161 of the Rules.
End Notes!
With the help of legal professionals like Legal251, you can be sure that your due date will be met. Also, you won’t miss any deadlines or mistakes. The DRC-03 form is used to file voluntary tax payments as stated by the GST law of our country. This form can also be filled in case you have already filed a GST return but need to correct it.
